Jean-Louis Borloo

Jean-Louis Borloo est le ministre français de l'Écologie, de l'Énergie, du Développement durable et de la Mer, en charge des Technologies Vertes et des Négociations sur le Climat depuis 2007. Il a organisé le Grenelle de l'environnement.

Crédit photo © AFP PHOTO / FRANCOIS GUILLOT

Summary / Synopsis
Governments need to urgently identify how ambition can be raised on climate
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Le sketch de German Watch sur le changement climatique. Sous titrage WWF

Europe needs to reduce emissions by 30%

22/07/2010 1:21 pm

Europe’s current focus on recovery from recession must not distract us from the question of what kind of economy we want to build. Unless we set our countries on a path to a sustainable low-carbon future, we will face continued uncertainty and significant costs from energy price volatility and a destabilising climate.

This is why we today set out our belief that the European Union should raise its emissions target. A reduction of 30 per cent from 1990 levels by 2020 would represent a real incentive for innovation and action in the international context. It would be a genuine attempt to restrict the rise in global temperatures to 2°C – the key climate danger threshold – stiffening the resolve of those already proposing ambitious action and encouraging those waiting in the wings. It would also make good business sense.

The current target of a 20 per cent reduction now seems insufficient to drive the low-carbon transition. The recession by itself has cut emissions in the EU’s traded sector by 11 per cent from pre-crisis levels. Partly as a result, the price of carbon is far too low to stimulate significant investment in green jobs and technologies.

If we stick to a 20 per cent cut, Europe is likely to lose the race to compete in the low-carbon world to countries such as China, Japan or the US – all of which are looking to create a more attractive environment for low-carbon investment.

By moving to a higher target, the EU would have a direct impact on the carbon price through to 2020 and also send a strong signal of our commitment to a low-carbon policy framework in the longer term. We must not forget that building a low-carbon future depends overwhelmingly on the private sector. Moving to a 30 per cent target would provide greater certainty and predictability for investors.

Europe’s companies are poised to take advantage of the new opportunities. They currently have a global market share of 22 per cent of the low-carbon goods and services sector, thanks to Europe’s early leadership in tackling climate change. But the rest of the world is catching up. The Copenhagen commitments, though less ambitious than we had hoped, have triggered widespread action, notably in China, India and Japan.

Because of reduced emissions in the recession, the annual costs in 2020 of meeting the existing 20 per cent target are down a third from €70bn ($89bn, £59bn) to €48bn. A move up to 30 per cent is now estimated to cost only €11bn more than the original cost of achieving a 20 per cent reduction. In addition, delayed action would come with a high price tag: according to the International Energy Agency, every year of delayed investment on low-carbon energy sources costs €300bn to €400bn at the global level.

Furthermore, these costs were calculated on the conservative assumption that oil will cost $88 (€69, £58) a barrel in 2020. Given the current constraints on supply-side investment, rapid growth in consumption in Asia, and the impact of the Gulf of Mexico oil spill, oil prices may well rise further; under one IEA scenario, the price could reach a nominal $130 a barrel. Rising oil prices would lower the costs of hitting any targets and, under some scenarios, the direct economic effects of hitting the 30 per cent target by 2020 actually turn positive.

Some energy-intensive sectors will be exposed to greater costs than the average. We already try to safeguard them through free emissions allowances where necessary, and alternative measures might be needed over time. The real threat that such industries face, though, is not carbon prices but collapsing demand in the European construction and infrastructure markets. One sure way to increase demand for the materials these sectors produce is through incentives to boost investment in large-scale low-carbon infrastructure – a voracious user of steel, cement, aluminium and chemicals. Our industry departments are working to ensure that we manage the transition effectively and maximise opportunities for these sectors.

Ducking the argument on 30 per cent will put us in the global slow lane. Early action will provide our industries with a vital head start. That is why we believe the move to 30 per cent is right for Europe. It is a policy for jobs and growth, energy security and climate risk. Most of all, it is a policy for Europe’s future.

[

Europe needs to reduce emissions by 30%

by Jean-Louis BORLOO (, Norbert RÖTTGEN (German federal environment minister) and Chris HUHNE (UK climate change secretary)

]